FMC Commissioner Approves Amended G6 Alliance Agreement

MarineLink.com

Wednesday, April 02, 2014

Commissioner William P. Doyle: Photo credit FMC

Commissioner William P. Doyle of the U.S. Federal Maritime Commission has voted in favor of the amended G6 Alliance Agreement. Commissioner Doyle highlighted the U.S.-Flag international trade, U.S. mariner jobs and environmental benefits. He also pointed out concerns on some language in the amendment on how the G6 Parties may handle discussions and agreements with tug operators. An extract from the Commissioner's statement follows:

"I am in favor of not taking any further action to delay the implementation of the amended G6 Alliance Agreement that was filed with the Federal Maritime Commission (FMC or Commission) on December 2, 2013.

The amended G6 Alliance Agreement provides for an additional 17 services. The parties intend to jointly coordinate the operation and sharing of space on about 180 - 220 container vessels with a maximum capacity of 14,000 twenty-foot equivalent units (TEUs).

The parties to the G6 Alliance are American President Lines, Ltd. (APL), Hapag-Lloyd Aktiengesellschaft (Hapag-Lloyd), Hyundai Merchant Marine Company (Hyundai), Mitsui O.S.K. Lines (MOL), Nippon Yusen Kaisha (NYK), and Orient Overseas Container Line Limited (OOCL). Furthermore, the G-6 Alliance is a vessel sharing agreement between parties of the New World Alliance (APL, Hyundai, and MOL) and the parties of the Grand Alliance (Hapag-Lloyd, NYK, and OOCL).

I have reviewed all the public comments, submitted my own questions to the G6 Parties as part of the Commission’s request for additional information (RFAI), and reviewed the G6 Parties’ RFAI responses. I am pleased that the G6 Parties have recommitted in this amended agreement to abide by the applicable laws and regulations and will maintain their separate and individual identities pertaining to sales, pricing and marketing functions. I also appreciate APL’s and Hapag Lloyd’s commitment and support to the United States with respect to jobs and the commercial ships they have registered under the U.S.-Flag. The G6 Parties have provided quality information with respect to their environmental program.

I am highlighting as a concern Article 5.9 of the amended Alliance Agreement where the Parties have added the term tug services. Tug owners and operators should be aware of the vague language in this clause. In any event, the G6 Parties must comply with all U.S. laws should they discuss and agree upon jointly contracting for tug services. The application of this provision should require special purpose monitoring.

The G6 Parties should be mindful of the antitrust probes that are being conducted in the oceanborne transportation sector – worldwide. To this end, the FMC will continue to monitor this Alliance. Specifically, the Federal Maritime Commission will be modifying its current monitoring program to reflect the new services outlined in the amendment."

The Commissioner's statement in full is at: http://www.fmc.gov/commissioner-doyle-g6-vote/